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Finance Bill

Retrospective Amendment in Section 140 of CGST Act 2017 : Seeks to regularize the lacuna in the law and to end the ongoing litigation.

Notification No. 43/2020 - Central Tax, Dated 16.05.2020

What was the amendment in Section 140 of the CGST Act, 2017?

Section 140 of the CGST Act deals with transitional credit under GST. The words "within such time" has been inserted among various provisions of Section 140 of the CGST Act, 2017 by the Finance Act, 2020. The said amendment has been given a retrospective effect from 1st July 2017 i.e. the very first day of GST implementation. However the said provision of Finance Act, 2020 was not put in force till now. Now the amendment has been put in force by CBIC vide Notification No. 43/2020 - Central Tax dated 16.05.2020 from 18th May 2020.

What was the need of amendment?

Prior to the above amendment, section 140 did not provide any time limit for availing transitional credit under GST. However Rule 117 of CGST Rules, 2017 do contain the time limit but in past 2 years, various writs were filed by taxpayers before High Courts challenging the validity of the time limit provided under Rule 117 of the CGST Rules, 2017 to avail the transitional credit under GST.

High Courts held that CGST Rules cannot override CGST Act. And since CGST Act does not authorise any time limit for availing transitional credit under GST therefore CGST Rules that prescribe the time limit to avail the transitional credit is unlawful. So there was ongoing litigation about the validity of Rule 117.

Recently a judgement was passed by Delhi High Court on 05.05.2020 in favour of assessees allowing them to file their TRAN-1 before 30.06.2020 in the below cases by a combined order - Read more about this.





The above amendment seeks to regularize the lacuna in the law and to end the litigation with respect to validity of Rule 117 of the CGST Rules.

What will be the effective date of amendment?

Although the above amendment in section 140 of the CGST Act, 2017 is effective from 01st July 2017 however section 128 of Finance Act, 2020 (through which the above amendment has been made) has been put in force from 18th May 2020. This implies that the amendment does not intend to reverse the actions done by taxpayers before 18th May 2020.

Notification No.43/2020 - Central Tax Dated 16.05.2020

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Posted by


on May 17, 2020


By: Gajanan Khare Adv | Dt: May 17, 2020
My client failed to file Tran 1 and so didn't avail vat ITC held in 30.06.2017. Can we now apply for the same?
By: Gk | Dt: May 17, 2020
Valuable input for viewers.
By: Raghavendra Rao Svs. Advocate. | Dt: May 17, 2020
kindly open tran1 so we can able to avail vat input
By: Kindly Open Tran1 So We Can Able To Avail Vat Input | Dt: May 18, 2020
My one of client filed tran1 and get the credit for the bill on which excise seperately mentiomed but due to some technical mistake we did put figer of the bill on which excise not mentioned seperately hence meed to revise tran1 kindly allow to revise tran1 and permit to allow tran2
By: Pradeep Kumat Sharma | Dt: May 18, 2020

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